“This tax plan will provide the wealthiest North Carolinians a tax cut while middle-class and low-income taxpayers pay more.

The only amendment accepted makes things worse — adding $525 million to the price tag and bringing the revenue loss each year to nearly a $1 billion. Without this vital revenue, North Carolina can’t make needed investments in our economy, our children’s education, the health of our seniors and the safety of our communities.”

The League of Women Voters of North Carolina, meeting in Charlotte for its 34th biennial convention, announced its opposition to tax plans now being considered in the General Assembly which promote unfair and regressive tax policies, including House Bill 998. This opposition is in line with long-standing positions of the non-partisan organization.

The League, which led the successful state-wide campaign to repeal the tax on food in the 1990’s, expressed concern that the tax plans being considered in the General Assembly will actually impede, rather than deliver, economic growth, job creation and the quality of life for NC citizens. Read More

Research has long shown that the Earned Income Tax Credit (EITC) for working families significantly encourages work—especially among single mothers—and reduces child poverty more than any other existing policy tool. Although the EITC is largely a temporary support, new research by the Center on Budget and Policy Priorities indicates that this tax credit generates broader benefits that extend well into adulthood for the recipients’ young children. These children perform better in school, are more likely to go to college, and earn more when they reach adulthood.

For instance, a $3,000 boost in income from the EITC during a child’s early years is associated with a boost in educational achievement that is equivalent to an extra two months of schooling. And as illustrated in the infographic below, a boost in income from the EITC during a child’s early years can contribute to a significant increase in earnings in adulthood as well as increased work activity for individuals between the ages of 25 and 37. Read More

As part of the generalized War on the Poor that they’ve been waging in recent weeks, state lawmakers have taken aim on the state Earned Income Tax Credit — an efficient program that provides workers earning low wages with a credit to offset their total state and local tax contributions.

Two new items documenting the folly of this action are worth a look this morning:

This afternoon, legislators serving in the NC House are scheduled to approve HB 82, a bill that would reduce the state Earned Income Tax Credit (EITC) from 5 percent to 4.5 percent of the federal credit for tax year 2013. Worse yet, legislators have already stated that they will not extend this important tax credit beyond its sunset date at the end of the year. Doing so would shift the tax load to the state’s lowest-earning families and could push more North Carolinians into poverty, according to a new report released today by the NC Budget and Tax Center.

North Carolina’s tax system does little to help low-earning workers and their children who are living on the margins; it actually makes it harder for them to meet basic needs. Even with the state EITC—which provides workers earning low wages with a credit to offset their total state and local tax contributions—moderate- and low-income working families still pay a greater share of their income in state and local taxes compared to the upper-middle class and wealthy. As policymakers consider changes to the state’s tax code this legislative session, it is critical to maintain this important tax-equity tool. Read More